Even with Sears and Bon-Ton filing for bankruptcy protection this year, and shutting hundreds of locations, department stores still account for more than 350 million square feet of mall space across the United States.

Mall real estate investment trust Macerich MAC currently trades roughly 15% below our $59 fair value estimate. Macerich has successfully transitioned its portfolio through asset sales of lower-quality malls and redevelopment of higher-quality properties into a true Class A mall portfolio. While we recognize that e-commerce will continue to apply significant pressure to brick-and-mortar retail, we believe there will be a continued bifurcation of physical retail performance, with the highest-quality assets continuing to produce strong sales growth while the lower-quality product sees foot traffic and sales decline.

Retail landlord Macerich this weekend is launching a concept known as BrandBox, a place where young brands can have their own stores, at Tysons Corner Center in the Washington, D.C. area. Macerich says it will take BrandBox to other malls and will continue to roll out new locations, as retailers like Sears, Toys R Us, Mattress Firm and Claire's shut stores. Other malls in the U.S. are also experimenting with similar spaces that house online brands together on a rotating basis, giving those brands perks like inventory tracking technology and marketing.

In 1993 Art Coppola was appointed CEO of Macerich Company (NYSE:MAC). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we Read More...